The impression that India tries to dominate and interfere in the domestic affairs of smaller neighbours is partly correct but requires a balanced understanding. Given India's size and power in the region, smaller countries are naturally bound to be suspicious of India's intentions. Many neighbours fear that India wants to be a regionally-dominant power.

Bangladesh provides a clear example of this perception. Bangladeshi governments have felt that India behaves like a "regional bully" over the sharing of river waters, encourages rebellion in the Chittagong Hill Tracts, tries to extract natural gas, and is unfair in trade. Similarly, many leaders and citizens in Nepal think that India interferes in its internal affairs, has designs on its river waters and hydroelectricity, and prevents the landlocked country from getting easier access to the sea through Indian territory.

However, the Indian government's perspective is different. India often feels exploited by its neighbours and does not like political instability in these countries, fearing it can help outside powers to gain influence in the region. India's central geographical position, where it borders all other South Asian countries, also contributes to the frequency of conflicts.

Despite these tensions, relations are not entirely hostile. Indo-Nepal relations remain fairly stable and peaceful, with trade, scientific cooperation, common natural resources, and interlocking water management grids holding the two countries together. Thus, while the impression of domination exists due to India's size and actions, it is not entirely accurate as India also has genuine security concerns and maintains cooperative ties with its neighbours.